B202

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE
----------------------------------------------------- x
In re Chapter 11
WASHINGTON MUTUAL, INC., et al.,l Case No. 08-12229 (MFW)
Debtors. Jointly Administered
------------------------------------------------------ x
WASHINGTON MUTUAL, INC. AND
WMI INVESTMENT CORP.,
Plaintiffs and Counterclaim
Defendants,
v.
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION,
Defendant and Counterclaimant.
------------------------------------------------------ x
JPMORGAN CHASE BANK, NATIONAL
ASSOCIA nON,
Cross-Claimant,
v.
FEDERAL DEPOSIT INSURANCE
CORPORA nON, as Receiver of
Washington Mutual Bank, Henderson,
Nevada,
Cross-Claim Defendant.
x
Adversary Proceeding No. 09-50934
(MFW)
DECLARATION OF
C. JACK READ
The Debtors in these chapter 11 cases and the last four digits of each
Debtor's federal tax identification numbers are: (i) Washington Mutual, Inc. (3725) and
(ii) WMI Investment Corp. (5395). The Debtors continue to share the principal offices
with the employees of JPMorgan Chase located at 1301 Second Avenue, Seattle,
Washington 98101.
B203
I, C. JACK READ, hereby declare under penalty of perjury as follows:
1. I joined Washington Mutual Bank, Henderson Nevada ("WMB"),
on July 5, 2005, as the Director of State and Local Tax, Planning and Consulting. I later
became Senior Vice President for Corporate Tax. From 1993 until 2004, I was with the
tax group of KPMG, and was a partner at the time I left KPMG. I received my law
degree from Temple University in 1993.
2. I am currently employed by JPMorgan Chase Bank, N.A.
("JPMC") as Managing Director, Tax. I began to work for JPMC as of September 26,
2008, immediately following JPMC's purchase of WMB's assets from the Federal
Deposit Insurance Corporation (the "FDIC Transaction"). I submit this declaration in
support of the opposition of JPMC to Plaintiffs' motion for summary judgment.
3. In my role with WMB, I not only worked on state and local tax
issues, I also worked on federal tax planning and on transactions. As a result, I am
familiar with the tax policies and accounting that were used by Washington Mutual, Inc.
("WMI"), WMB, and their respective subsidiaries and affiliates, including Washington
Mutual Bank, fsb ("WMB fsb") (collectively, the "WaMu Group"). Exhibit A through
Exhibit E attached hereto contain documents and information compiled from data
maintained by the WaMu Group in the ordinary course of business.
4. The WaMu Group entered a tax sharing agreement (the "Tax
Sharing Agreement") on August 31,1999. The Tax Sharing Agreement established that
the WaMu Group would file a consolidated federal income tax return and consolidated or
combined tax returns in various states and other local taxing authorities. The Tax
Sharing Agreement also established the manner in which the group would allocate tax
-2-
B204
liability - as if each entity had filed a separate return. As such, the tax liability of each
entity was determined on a stand alone basis and was to be paid to the common paying
agent. A true and accurate copy of the Tax Sharing Agreement is attached as Exhibit A.
5. Pursuant to the Tax Sharing Agreement and regulations
promulgated by the U.S. Department of the Treasury and the U.S. Internal Revenue
Service (the "IRS"), the WaMu Group, with certain exceptions not herein relevant
2
, filed
a single, consolidated U.S. federal tax return for each taxable year prior to 2008.
3
6. WMI was the common parent of the consolidated group and served
as the taxpaying agent for the group.4 As agent for the WaMu Group, WMI was
responsible for the preparation and filing of the group's consolidated U.S. federal tax
returns, as well as making all tax payments due, and collected, from members of the
WaMu Group.
7. To the extent permissible under applicable state law, the WaMu
Group also filed consolidated tax returns, unitary reports or similar, combined returns in
the various states and other local taxing jurisdictions with WMI acting as agent for the
WaMu Group pursuant to relevant state and local laws. Notwithstanding the provision of
the Tax Sharing Agreement concerning payment of state tax liabilities, in practice (i)
WMI included WMB's tax obligations in the payments it made for the tax liabilities for
the WaMu Group on the consolidated, unitary or combined state tax returns and was the
:2 Non-consolidated entities included, but were not limited to, the real estate
investment trusts (University Street, Inc., Seneca Street, Inc., and Marion Street, Inc.) and
deconsolidated corporations (Rivergrade Corp. and Flower Street) .
.l WMI became the common parent in 1994 .
.. Id.
-3-
B205
named entity doing so, and (ii) WMI would adjust amounts owed from WMB or its
subsidiaries for state taxes paid on the general ledger. For example, WMI filed a unitary
tax report for the WaMu Group in California for state tax liabilities each year prior to
2008. WMI was designated as the "key corporation", as defined under California state
tax law, and acted as agent for the WaMu Group. The California amounts made up over
90% of the WaMu Group state tax liabilities and refunds.
8. For the 2008 tax year, WMB and its subsidiaries were members of
the WaMu Group for purposes of the federal and certain of the state or local consolidated,
unitary or combined returns (the "consolidated returns") until at least September 25,
2008.
5
9. Because WMI had no material operations as a parent holding
company, historically more than 90% of the tax liability incurred by the WaMu Group
was attributable to the activities of WMB and its subsidiaries. In the tax year 2007, this
percentage exceeded 99%.
10. Pursuant to the Tax Sharing Agreement, federal regulations, and
practice, WMB made quarterly payments to WMI for its estimated federal tax liabilities
in the same manner and at the same time as if WMB and its subsidiaries were filing
separate returns or separate consolidated forms. These payments were made into the
account ending in 0667 held at WMB in the name of WMI. A true and accurate copy of a
sample wire transfer form for federal estimated taxes reflecting the recipient account
number is attached as Exhibit B.
5 WMB and its subsidiaries are also filing a pro forma consolidated U.S. federal
tax return for 2008 on behalf of the FDIC as receiver.
-4-
B206
State Tax GL Payments
11. Over a period of at least five years, a state tax accounts payable
existed on the books of Washington Mutual that purported to reflect amounts that WMI
estimated it would pay in state taxes on behalf of WMB. This state tax accounts payable
appeared on the GL as 51830 (with varying cost centers depending upon the year at
issue), due from WMB to WMI (the "State Tax GL"). The State Tax GL was not
collateralized and was not backed by good funds. As of August 2008, the State Tax GL
reflected approximately $1 billion dollars due from WMB and its subsidiaries to WMI.
12. With the exception of a $174,825,844 payment from WMB to
WMI in 2003, attempting to settle state tax liabilities for the years 1998 through 2001,
WMB never paid any amounts due to WMI as a result of the State Tax GL.
13. In August and September 2008, WMB paid off the State Tax GL.
Specifically, WMB paid WMI $600 million in August and $322 million in September,
purportedly to payoff substantially all of the State Tax GL. WMB's payments were
made into the account ending in 0667 held at WMB in the name of WMI. True and
accurate copies of screen shots of the Hogan deposit system, reflecting these transfers and
the account into which they went, are attached as Exhibit C.
Tax Refunds Due to WMB
14. As parent and consolidated and combined taxpaying agent for the
WaMu Group, WMI received tax refunds issued by the IRS and by other taxing
authorities. Pursuant to the Tax Sharing Agreement, WMI was to pay each entity any
overpayment for its said tax liability for a taxable year.
-5-
B207
15. For example, on February 26, 2008, the WaMu Group received a
federal tax refund from the IRS totaling $1.94 billion with respect to the amended federal
returns for the WaMu Group for the tax years 2001 through 2004. The refund was made
in three separate wires by the IRS into the account ending in 0667 held at WMB in the
name of WMI. True and accurate copies of screen shots from the Hogan deposit system,
reflecting these wires and the account into which they went, are attached as Exhibit D.
As 99.99% of the adjustments on the amended returns related to WMB items, WMI paid
the entire $1.94 billion to WMB.
16. More recently, the WaMu Group's consolidated 2007 Federal
Income Tax Return, filed in September 2008, reflected a tax overpayment of $274.5
million. Of this amount, $40 million was applied to the WaMu Group's 2008 tax return.
The WaMu Group requested that the remaining $234.5 million be refunded. On
September 30, 2008, the IRS wired $234.5 million into the account ending in 0667 held
at WMB in the name of WMI. True and accurate copies from the Hogan deposit system
reflecting the receipt of the $234.5 million in the 0667 account are attached as Exhibit E.
Most or all of the $234.5 million reflects a refund attributable to WMB's operations and
prior tax payments. WMI has never transferred these funds to an account in WMB' s (or
JPMC's) name.
17. Prior to September 25,2008, WMI also received state tax refund
checks which were deposited into the account ending in 0667 held at WMB in the name
of WMI. These checks reflected refunds attributable to WMB's operations. WMI has
never transferred these funds to an account in WMB' s (or JPMC' s) name.
-6-
B208
I hereby declare under penalty of perjury that the foregoing is true and
, , ~ ...
correct. Executed thiso?.:t day of July 2009 at Brooklyn, New Yark.
-7-
B209
Exhibit A
B210
TAX SHARING AGREEMENT
e/
10.02.281ax Sharing Agmt Aug99.pdf
VI
THIS TAX SHARING AGREEMENT ("Agreement") is made as of August 31. 1999 by
and among Washington Mutual, Inc., a Washington corporation ("WMI"), Washington Mutual
Bank fsb, a federal savings bank ("WMBfsb"), Washington Mutual Bank, a state chartered
savings bank ("WMB''), New American Capital, Inc., a savings and loan holding company
whose principle subsidiary is Washington Mutual Bank, FA, a federal savings association
("WMBF A") and Aristar, Inc., a Delaware corporation, on behalf of themselves, each of their
current subsidiaries and all subsidiaries that anyone or more of them may own in the future
(together, the "Subsidiaries"). This agreement supersedes the Tax Shabng Agreement dated
March 30, 1998 among WMI and subsidiaries.
WHEREAS, WM1 owns 100% of the issued and outstanding capital stock of WMBfsb,
WMB and NACI.
WHEREAS, WMI owns either directly or indirectly, 100010 of the issued and outstandina
capital stock of the Subsidiaries;
WHEREAS, NACI owns 100% of the issued and outstanding capital stock of WMBF A
and Aristar, Inc.;
WHEREAS, WMI, WMBfsb, WMBiNACI, WMBFA, Aristar, Inc . and the Subsidiaries
join in the filing of a consolidated fedCl,ld income tax return and combined or consolidated tax
returns in various states and other load laxingjurisdi.cti.ons; and
WHEREAS, it is the desin: of the PlU'ti's hereto to enter into a definitive. written Tax
Sharing Agreement, which agreement the iti'which the conJOlidated federal
income tax liability is shared among the members oftbe group and the manner in
which the combined or consolidated state or other 1,x:.aiux is shared amoog members of the
combined or consolidated group;
NOW, THEREFORE, in consideration of the fONgwng premises, the parties agree as
follows:
1. For all taxable years during which WMB, NACI. WMBFA, Aristar, Inc., or any
Subsidiary is a member of an "aftiliste<lgrOup" ofWMI as defined in Section 1504 ofthc
Internal Revenue Code and is to join in the filing of a consolidated federal income
tax return of WMI and its consolidated subsidiaries, the federal income tax liability of such
consolidated group shall be allocated and shared among WMBfsb, WMB, NACI. Aristar,
Inc., and each Subsidiary as if such entities filed a separate or consolidated return, as the case
maybe.
2. The federal income tax accounts between WMI, WMBfsb, WMB, NACI. WMBFA, Aristar.
Inc., and each subsidiary shall be settled in the following manner:
f
B211
Tax Sharing Agmt Aug99.pdf
(a) WMBfsb, WMB, NACI, WMBF A, Aristar, Inc., and each Subsidiary shall make
payments on account of their federal income tax liability to WMI in the same manner and
at the same time as if such entities were filing separate returns or separate consolidated
returns with, and making payment of taxes (including estimated taxes) to the Internal
Revenue Service ("IRS").
(b) WMI shall pay to WMBF A, WMBfsb, WMB, NACI, Aristar, Inc., and each Subsidiary
amounts that may be due them on account of (i) any overpayment of their said tax
liability for a taxable year or (ii) any credit that may result from the utilization of their net
operating loss for a taxable year, such credit being detennined in accordance with the
provisions of item I above, within 30 days after the consolidated return is filed for that
taxable year or, to the extent any such amount due must be recovered from the IRS,
within 30 days after payment is received from the IRS, or, if the amount due replesents
an overpayment of estimated tax which is in excess ofWMBFA's, WMBfsbts. WMB's.
NACI's, Aristar, Inc. 's or a Subsidiary's estimated allocable share of the consolidated
federal income tax liability for the year, then such excess shall be paid by WMI within 30
days of receipt from WMBF A, WMBfsb, WMB, NACI, Aristar, Inc . or the Subsidiary of
a written explanation of the overpayment.
3. For all taxable years during which WMBfsb, WMB, NACI, WMBF A, Aristar, Inc., or any
Subsidiary is included in a combined or consolidated tax return with WMI or another of its
subsidiaries, the state or other local tax liabi!ity of such combined or consolidated group shall
be allocated to:
(a) WMBfsb, WMB, NACI, WMBFA, Aristar, Inc'l'i11d each Subsidiary as if each of
WMBfsb, WMB, NACI. WMBF A, and such either Subsidiary had filed a separate.
combined or consolidated tax return wiweach of its respective
(b) WMI to the extent the sum of the auiounts determinop pursuant to ch\WJC (a) is different
from the liability of the combiiredor consolidated group.
In no event will the foregoing allocation restiJtin treatment less favorable to WMBfsb,
WMB, WMBF A, and their subsidiarieS than if they had separate, combined or
consolidated tax returns, as the case may be.
4. The state and other local tax accounts between \VMI. WMBfsb, WMB. NACI. WMBF A.
Aristar, Inc., and each Subsidiary shall. be settled in the following manner:
(a) WMBfsb. WMBF A, NACI, Aristar, Inc., and each Subsidiary shall make payments on
account of their state and other local tax liability to WMB in the same manner and at the
same time as if such entities were filing separate returns or separate combined returns
with, and making payments of taxes (including estimated taxes) to such state or other
local taxing authority. WMB shall compute its state and other local tax liability in the
same manner and at the same time as if such it were filing a separate return with, and
making payment of taxes (including estimated taxes) to such state or other local taxing
authority.
(b) WMI shall make payments to WMB in an amount necessary to satisfy the state and other
local tax liability after considering the payments computed in (a) above.
B212


.0.02.28 Tax Sharing Agmi Aug99.pdf
(c) WMB shall pay to WMI, WMBfsb, WMBFA, NACI, Aristar, Inc., and each Subsidiary
amounts that may be due them on account of (i) any overpayment of their said tax
liability fOT a taxable year or (ii) any credit that may result from the utilization of their net
operating loss for a taxable year, such credit being detennined in accordance with item 3
above, within 30 days after the combined or consolidated return is filed for that taxable
year or, to the extent any such amount due must be recovered from any state or other
local taxing authority, within 30 days after payment is received from such state or other
local taxing authority, or, if the amount due represents an overpayment of estimated tax
which is in excess ofWMI's, WMBfsb's, WMBFA's, Aristar, Inc. 's, or a
Subsidiary's estimated allocable share of the or combined State or local tax liability for
the year by more than 10%, then such excess shall be paid by WMB within 30 days of
receipt from WMI, WMBfsb. WMBF A, NACI, Aristar.lnc., or the subsidiary of a
written explanation of the overpayment
5. Deferred tax assets and liabilities of WMI, WMBfsb, WMB, NACI, WMBF A, Aristar, Inc.,
and each Subsidiary will be bandIed in a manner consistent with Statement of Financial
Accounting Standards No. 109 and, as it relates to WMBfsb, WMB, and WMBFA, consistent
with bank and thrift regulatory guidelines. A copy of the current regulatory guidelines is
attached hereto as Exhibits A and B.
6. This agreement shall remain in full force and eft'tlct until modified or amended by the mutual
agreement of the parties hereto.
IN WITNESS WHEREOF, the partIes hereto have executed this Agreement as of this
date flI'St above written:
New Am can Capi".. t .
} ,
By 1/ ..
Ke
Mutual Bank ..,/
BY!diL.. Xi-.
William Longbrake, Vice Ch and
Washington Mutual Bank, FA
By
William Longbrake. Vice C and
Chief Financial Officer
Chief Financial Officer
B213
Exhibit B
B214
FUNDS TRANSFER APPLICATION
DWashington Mutual Bank
DWashington Mutual Bank fsb
Date: I
12/15/06
I TestKey Code #: I
1101 2nd Avenue
PO box 834
Seattle W A 9811 I
This information is confidential. If you are not the intended
recipient, do not use, copy or disseminate. Contact us at
1-800-756-8000 and return to us at the address on the left.
I Recurring code: I

Financial CenterlDepartment name: Tax Management , Phone #: (206)461-8861

Account # to be charged: GLIRC #: 51800 , 9422
$(Amount to be wired): 950,000,000.00 Fee: 0.00 Document #:

Customer Name: 'Washington Mutual Bank SSNIEIN: 68-0172274
Customer Street Address I
City State Zip Country 1-. ____________ ---y __ --:-:--:--________ ,-__________ ---1
Customer Phone #: Initiating company ABA # 321180748

Receiving Institution Routing/ABA #: 321180748 Receiving Institution
Recipient name : Washington Mutual Inc. Recipient account #: , 1791650667
Recipient Address
City, State, Zip, Country
Additional Information: 2006 4Q Estimated Tax Payment
FINANCIAL CENTER ONLY:
Preparer's signature:
(Prepared by:)
Approver's signature:
(Approved by:)
Close account?: Yes 0 No 0
Test Key verified by:
WIRE TRANSFER ONLY:
.------------11 TimelL....-4_:31_PM------'
Laurie Hanson .
Curt Brouwer Pat Schulte
Pledge placed by Time pledge placed:
Confirmed by/with: '--______ ---'-______ ----', Time: ,'--___ ---'
I authorize Washington Mutual Bank or Washington Mutual Bank fsb as mentioned above (the "Bank") to transfer funds as shown on this remittance
order ("Transfer Order"). I am responsible for the accuracy of the above information; Bank and subsequent parties to the Transfer Order may act solely on
the basis of number if name and number disagree, notwithstanding knowledge of any inconsistency. Bank will send the funds by any funds transfer
payment system or intermediary bank, at its discretion. If Transfer Order requests payment in a foreign country, Bank may execute the Transfer Order in
such foreign country's currency at the Bank's buying rate of exchange for U.S. dollars when the transfer is effected. Confirmation of receipt from the
Recipient is not required; if requested, the Bank will request confirmation but will not be responsible for receipt. A Confirmation Request Fee may be
assessed.
There IS no right to cancelaI' amend a Transfer Order. Bank, at its option, may attempt cancellation or amendment if this Application has not been
acted on, but will have no liability if cancellation or amendment are not effectuated. In any event, Bank will not credit funds until Bank confirms
Redpient has not received funds and any funds transmitted have been returned. Bank has no obligation to re-execute any rejected or returned Transfer
Order. Rank will credit any account following return or rejection. Any credit may not be equal to the original amount due to, for example, differences in
foreign currency exchange rates, or cable fees and expenses of Bank or other banks. In addition, Bank will have no obligation to pay interest on any
c'ancelled, returned or rejected Transfer Order.
The Bank is not responsible to any transferee, beneficiary, or other party as a result of this Transfer Order nor shall Bank be liable for insolvency,
neglect, misconduct, mistake or default of another bank or person, including an originator, except as provided in this Application. Bank will be liable only
to its immediate originator only for failure to credit the amount of this Transfer Order to the recipient's account solely as a result of Bank's failure to
exercise ordinary care or act in good faith; liability for such failure is limited to damages attributable directly and immediately to the failure to credit, but
not including consequential damages attributable to such failure, even if such consequences were foreseeable, special, punitive, or indirect loss or damages.
Subiect to the foregoing, Bank's responsibility for loss of interest for error or delay shall be calculated using a rate equal to the average Fed Funds rate of the
Federal Reserve Bank of New York for the period involved.
Ii you have received this communication in error, please immediately notify us by telephone at 1-800- 756-8000 and return this facsimile to us at the
above address via the us postal service. Thank you.
Customer Signature: X Date:
2648 (7197) FAX IN FINE MODE
B215
Exhibit C
B216
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B219
Exhibit D
B220
: MELANIE STOCKWELL MS:CSQ0815
TLE WA
BOX 834 98111
111791650667
INGTON MUTUAL INC
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B223
Exhibit E
B224
B225
B226
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
___________________________x
In re
WASHINGTON MUTUAL, INC., et al.
Debtors.
WASHINGTON MUTUAL, INC. AND
WMI INVESTMENT CORP.,
Plaintiffs,
v.
JPMORGAN CHASE BANK,
NA TlONAL ASSOCIATION
Defendant.
___________________________ x
Chapter 11
Case No. 08-12229 (MFW)
Jointly Administered
Adv. Pro. No. 09-50934 (MFW)
DECLARATION OF
CAREY M. BRENNAN
1, Carey M. Brennan, declare under penalty of perjury as follows:
1. Throughout 2008, I was the Senior Vice President, Deputy Chief Legal Officer &
General Counsel of Capital Markets for Washington Mutual Bank. 1 was also an officer of
Washington Mutual, Inc. ("WMI").
2. I have been informed that WMI has submitted an affidavit from Doreen Logan in
support of a Motion for Summary Judgment seeking a determination that certain accounts are
demand deposit accounts and that the funds in those accounts belong to WMI. I have been
further informed that Ms. Logan states, in paragraph 13 of her affidavit, that:
B227
On September 18, 2008, Carey Brennan ... initiated a telephone
conversation with Patricia Schulte, WMB's Senior Vice President,
Treasury, Cash Management. Ms. Schulte asked me [Doreen
Logan] to join the call. On that call, Mr. Brennan instructed that
the maximum amount of funds possible deposited in the 0667
demand deposit checking account at WMB immediately be moved
to a demand deposit account at WMB fsb.
3. To the best of my recollection and belief, the conversation that Ms. Logan
describes did not occur. Not only do I not recall the specific conversation that Ms. Logan
describes, I do not recall having any conversation with Ms. Schulte or Ms. Logan concerning
these matters during that time period. Moreover, I do not believe I would have had a
conversation with Ms. Schulte or Ms. Logan in which I directed the transfer of funds from WMB
to Washington Mutual Bank, fsb, Utah ("WMB fsb" and collectively with WMI and WMB,
"Washington Mutual") because I did not have responsibility for directing, or the authority to
direct, such a transfer of funds. It further seems implausible that I had such a conversation with
Ms. Schulte and Ms. Logan because my knowledge ofWMI's funds was limited and I was
relying upon information provided to me by senior officers of Washington Mutual's Treasury
Department to whom Ms. Schulte and Ms. Logan reported. I do not recall knowing the specific
amounts of any funds WMI had in deposits accounts at WMB or the types of such accounts; I
was not familiar with an account with the specific number "0667" and have no personal
knowledge with respect to any funds in that account; and I was unaware whether WMI had any
existing deposit accounts at WMB fsb.
4. I recall that efforts were made to move to WMB fsb funds ofWMI that were
described to me as WMI funds in deposit accounts at WMB and I recall that these efforts
occurred during the week or so prior to the seizure of WMB by the Office of Thrift Supervision
B228
("OTS") on September 25, 2008. I recall discussing the potential for such actions with Robert
Williams, Peter Frelinger and Chad Smith, as well as with Tom Casey and with Steve Rotella.
5. During that period of time, I was aware of the risk that the OIS might place
WMB into receivership and, having been told that WMI maintained sizeable deposit balances in
accounts at WMB, was concerned about the potential loss of any uninsured deposits of WMI at
WMB if the OIS were to put WMB into receivership. If the regulators seized WMB, I thought it
was possible that they would not seize WMB fsb because, as an operating subsidiary of WMB,
its seizure would not be necessary to gain control of it. I therefore suggested that WMI consider
moving any uninsured deposits from WMB to WMB fsb to protect those funds against potential
loss and to mitigate potential criticism from WMI's bondholders and investors that WMI's Board
of Directors had not taken appropriate steps to protect WMI's funds.
6. I understand that, given the amount of funds that would be transferred, Steve
Rotella and/or Tom Casey provided the Treasury Department the authorizations necessary to
proceed with a transaction involving the transfer ofWMI's funds from WMB to WMB fsb.
7. I was not informed, and had no knowledge or understanding, that any ofWMI's
funds that would be transferred to WMB fsb were going to be simultaneously loaned back to
WMB by WMB fsb.
8. I was not informed, and had no knowledge or understanding, that a transfer of
WMI's funds to WMB fsb would result in an increase in the principal amount of a master note
between WMB (as borrower) and WMB fsb (as lender).
9. I was not informed, and had no knowledge or understanding, of the mechanics by
which a transfer ofWMI's funds from WMB to WMB fsb would be effectuated, whether or not
B229
it be by wire transfer, physical delivery of funds or book entry.
I declare under penalty of perjury that the foregoing is true and correct.
Executed in t l R k / ~ Washington on July ll, 2009.
B230
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
______________________________ x
Inre
WASHINGTON MUTUAL, INC., et al.
Debtors.
WASHINGTON MUTUAL, INC. AND
WMI INVESTMENT CORP.,
Plaintiffs,
v.
JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION
Defendant.
______________________________ x
Chapter 11
Case No. 08-12229 (MFW)
Jointly Administered
Adv. Pro. No. 09-50934 (MFW)
DECLARATION OF ROSA COX
I, Rosa Cox, hereby declare under penalty of perjury under the laws ofthe United
States as follows:
1. I am an employee of JP Morgan Chase & Co ("JPMC"), as an accounting
manager. Prior to being employed by JPMC, I was an employee of Washington Mutual Bank
("WMB"), with the title of Assistant Vice President, Accounting Manager, Corporate
Accounting.
2. I have reviewed the affidavit of Doreen Logan dated May 19,2009. The affidavit
incorrectly reports on conversations Ms. Logan claims I had with her relating to $3.674 billion in
an account (the "Account").
B231
3. Ms. Logan claims that I explained to her the "proposed proposed new rules for
calculating federal deposit insurance premiums." (Logan Aff. ~ 46.) I did mention to her that
there were new rules, but I did not explain to Ms. Logan or anybody else any specifics for
calculating federal deposit insurance premiums. Indeed, to this day, I do not have knowledge of
how those rules operate and would not be able to explain them.
4. Ms. Logan states that I said, "JPMC federal deposit insurance premiums may
increase by about 10 basis points on the 3.674 billion deposit." I never said that to Ms. Logan. I
do not have knowledge of how JPMC calculates its federal deposit insurance premiums. I do not
know whether JPMC intends to increase or decrease those premiums as a result of the general
ledger entries referred to by Ms. Logan.
5. I declare that the foregoing is true and correct under penalty of perjury.
Executed this tl It day of July, 2009 at Seattle, Washington.
1<i2ytU V Cj)
Rosa Cox
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
-----------------------------------------------------
In re

WASHINGTON MUTUAL, INC., et al.,

Debtors.

------------------------------------------------------
WASHINGTON MUTUAL, INC. AND
WMI INVESTMENT CORP.,

Plaintiffs and Counterclaim
Defendants,

v.

JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION,

Defendant and Counterclaimant.
------------------------------------------------------
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION,

Cross-Claimant,

v.

FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver of
Washington Mutual Bank, Henderson,
Nevada,

Cross-Claim Defendant.

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Chapter 11

Case No. 08-12229 (MFW)

Jointly Administered



Adversary Proceeding No. 09-50934
(MFW)


DECLARATION OF THOMAS M.
BLAKE


I, Thomas M. Blake, declare as follows:
1. I am a Vice President at Charles River Associates Incorporated (CRA), an
economic, financial, and management consulting organization. At CRA, I am the Practice
B232
Leader for Financial Accounting and Valuation. Over the course of my career, I have led the
financial analysis for dozens of situations involving troubled companies and solvency. In
addition, I have been admitted as an expert and testified in solvency, accounting and valuation
cases in numerous federal district and bankruptcy courts, state courts, arbitrations, and other
venues.
2. Prior to joining CRA, I was a partner at Ernst & Young (E&Y). For fourteen
years, I was the managing partner of E&Ys New England Investigative & Dispute Services
Practice, and also led the firms Securities, Mergers & Acquisitions, and Bankruptcy Litigation
practices. Prior to that, I was an audit partner and served such clients as American Express,
Bank of New England, Bankers Trust, PaineWebber, and Shearson Lehman Hutton. Attached as
Exhibit A, is a copy of my Curriculum Vitae.
3. I have been retained by counsel for JPMorgan Chase & Co. (JPMC) in this
matter and I have been asked to opine upon the allegations of insolvency made in Debtors
Complaint for Turnover of Estate Property, dated April 27, 2009 (the Complaint) and Debtors
Motion for Summary Judgment, dated May 19, 2009 (the Motion).
4. Debtors assert that setoff is unavailable to JPMC because Debtors were insolvent
or rendered insolvent at the time of the transfer. (Complaint 8) They allege that the purported
transfer at issue occurred on September 25, 2008, upon the execution of the Purchase and
Assumption Agreement (P&A).
1
(Complaint 33-35) The Debtors further allege that they
are protected by a statutory presumption of insolvency (Motion p. 21) for the 90-day period
preceding WMIs petition (the 90-Day Look-Back period). I understand, however, that the

1
Purchase and Assumption Agreement among Federal Deposit Insurance Corporation,
Receiver of Washington Mutual Bank, Henderson, Nevada; JPMorgan Chase Bank,
National Association; and Federal Deposit Insurance Corporation, dated September 25,
2008.
Page 2 of 10
B233
presumption of a debtors insolvency is rebuttable based on the facts and circumstances of that
enterprises financial state in the period preceding the filing of the petition for bankruptcy.
5. On September 25, 2008 (the Date of Receivership), the Office of Thrift
Supervision (OTS) closed Washington Mutual Bank, Henderson, Nevada (WMB) and
appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. On the same day,
the P&A was executed, whereby JPMC purchased substantially all of the assets and assume[d]
all deposit and substantially all other liabilities from WMB (P&A, p. 1). The Debtors filed for
Chapter 11 on September 26, 2008.
6. In this affidavit, I discuss three issues: (i) the assets subject to dispute in this
matter are material to the determination of Debtors solvency; (ii) the appointment of a receiver
by the OTS is not determinative of financial insolvency as defined by the Bankruptcy Code; and
(iii) there are significant indicia of solvency that call into question Debtors presumption of
insolvency as of the Date of Receivership and during the 90-Day Look-Back period.
Accordingly, Debtors insolvency cannot be presumed and can only be established by
undertaking a rigorous analysis of the Debtors assets, liabilities and capital.

I. The Assets Subject to Dispute in the Matters are Material to the Determination of Debtors
Solvency
7. I understand that Debtors have asserted ownership over certain assets, the value of
which totals at least $10 billion (the Disputed Assets). These Disputed Assets principally
include, among other things, Trust Preferred Securities with purported liquidation value of
Page 3 of 10
B234
$4 billion,
2
and certain tax refunds with a purported value of $3 billion
3
. Debtors schedule of
assets and liabilities filed with U.S. Bankruptcy Court for the District of Delaware listed
$7.83 billion in liabilities and $4.48 billion in assets, exclusive of at least some of these Disputed
Assets (Motion, p.21). As such, a legal determination of the ownership of these disputed assets
is material to the financial determination of the Debtors solvency as of September 25, 2008, and
during the 90-Day Look-Back period It is not possible to reach a reliable opinion with respect
to the solvency of Debtors until one first knows whether Debtors owned some, all, or none, of
these assets.
II. The Appointment of a Receiver by the OTS is not Determinative of Financial Insolvency as
defined by the Bankruptcy Code
8. Although the OTS seized WMB (the largest asset of WMI prior to receivership)
on September 25, 2008, this seizure is not determinative of the financial insolvency (as defined
by the Bankruptcy Code
4
) of WMI as of that date.
9. The OTS did not conclude that WMB (or WMI) was insolvent as of the date of
receivership. Rather, it determined that:
5

(a) The Savings Bank is likely to be unable to pay its obligations or meet its
depositors demands in the normal course of business; and

2
Debtors Answer and Counterclaims in Response to JPMorgan Chase Bank, N.A., JPMorgan
Chase Bank, National Association v. Washington Mutual Inc., Adv. Pro. 09-50551, D.I.
23, filed 5/29/09, 32 (Debtors Answer and Counterclaim).
3
District Court Complaint filed on 3/20/09, 22.
4
11 U.S.C. 101(32).
5
Letter from OTS Regional Director, Darrel Dochow to Washington Mutual Bank, dated
September 25, 2008.
Page 4 of 10
B235
(b) The Institution is in an unsafe or unsound condition to transact business.
10. Moreover, the OTSs finding that WMB was in an unsafe and unsound
condition is not determinative of the insolvency of WMI or WMB during the 90-day Look-Back
period. After experiencing increased deposit outflows due to the IndyMac failure in July 2008
6
,
the pattern of deposit activity at WMB appeared to normalize until September 15, 2008.
Beginning on this date, WMB, which reported its deposit cash flows to the OTS on a daily basis,
began to experience significant cash outflows from its demand, time and other deposit accounts.
According to the OTS, [s]ignificant deposit outflows began [on that date] and . . . [d]uring the
next eight business days, WMB deposit outflows totaled $16.7 billion.
7
Based on the daily
deposit balances reported to the OTS, WMBs daily cash flows are shown on Exhibit B.
11. Nevertheless, from September 15, 2008 to September 25, 2008 WMB was able to
satisfy these deposit outflows. It was not until September 25, 2008 that the OTS seized WMB.
Importantly, the OTS stated that adverse events in the financial markets (OTS Fact Sheet, p. 1)
were the cause of the material deposit outflows.
12. Based on my review to date, there is no indication that the OTS performed a
solvency analysis consistent with the test for insolvency specified in the Bankruptcy Code.
There is no indication that the OTS assessed the fair saleable value of the assets of WMB (or
WMI). Nor is there an indication that OTS compared the fair saleable value of the assets of
WMB (or WMI) to the total amount of either companys respective liabilities. There is no
indication that the OTS performed a comprehensive cash flow analysis of WMB (or WMI).
Instead, the OTS found that WMB met the well-capitalized standards through the date of

6
On July 11, 2008, the OTS closed IndyMac Bank and transferred operations to FDIC.
7
OTS Fact sheet on Washington Mutual Bank, OTS 08-046A, dated 9/25/08. (OTS Fact Sheet),
p. 3.
Page 5 of 10
B236
receivership.
8
Thus, without a thorough analysis of the assets, liabilities and capital of WMI
and WMB, it is not possible to come to a reliable conclusion concerning the financial solvency
of either entity, whether on a consolidated or stand-alone basis.
III. There are Substantial Indicia of Solvency that Call Into Question Debtors Presumption
of Insolvency Prior to the Date of Receivership
13. Even before considering the Disputed Assets, Debtors have not claimed or
provided a sufficient factual basis for concluding that the amount of WMIs liabilities exceeded
the value of its assets, at fair saleable value, at any date prior to the Date of Receivership.
Debtors have not claimed or provided a sufficient factual basis for concluding that WMI was, or
was rendered, unable to pay its debts as they became due on any date prior to the Date of
Receivership. Finally, Debtors have not claimed or provided a sufficient factual basis for
concluding that WMI was, or was rendered, inadequately capitalized at any date prior to the Date
of Receivership. Further, the contemporaneous internal (i.e., company) and external (i.e., market
place) financial data that I have reviewed to-date cast doubt on the presumption of WMIs
insolvency for the 90 days preceding WMIs bankruptcy.
(a) There is significant data to suggest that WMI was able to pay its debts as they
became due prior to the Date of Receivership. For example, based on the current record, it
appears that:
(i) Neither WMI (as holding company) nor WMB failed to make any
scheduled interest or principal payment on third-party debt.
(ii) WMI continued to meet its operating expenses. For example, trade debt
and payroll continued to be paid through the Date of Receivership.
(iii) WMI issued a press release on September 15, 2008 stating that the S&P

8
OTS Fact Sheet, p. 2.
Page 6 of 10
B237
downgrade was attributable to worsening market conditions and not to any material change in
the evaluation of Washington Mutuals financial condition.
9

(iv) By mid-September 2008, the rates
10
on credit default swaps for WMI
investment grade debt had fallen from much higher levels in July and August 2008. Thus, the
markets perception appeared to be that of decreasing default risk.
(v) As late as September 16, 2008, WMI was anticipating the open market
repurchase of $1.4 billion of senior notes and a tender offer to repurchase $1.2 billion of covered
bonds.
11

(b) There is significant data to suggest that the value of WMIs assets, at fair saleable
value, exceeded the amount of its liabilities, prior to the Date of Receivership. In fact, based on
preliminary analysis, the net asset value of WMI appeared to be stabilizing, if not improving, as
of mid-September 2008. For example:
(i) Some Wall Street equity analysts expressed a favorable opinion about the
prospect for Washington Mutuals stock. On September 12, 2008, Goldman Sachss equity
research department upgraded its recommendation on Washington Mutuals common stock from
sell to neutral.
12
On September 19, 2008, Fox-Pitt Kelton published an equity research
report stating the Washington Mutual was significantly undervalued relative to what a likely
acquirer might pay, even after assuming additional losses of $5.00 per share.
13

(ii) As of September 19, 2008, the market capitalization of WMI (on a
consolidated basis) was over $7 billion.
14

(c) There is significant data to suggest that WMI was adequately capitalized prior to

9
WaMu Responds to Standard & Poors Actions; Notes Bank Remains Investment Grade at All
Agencies, Business Wire, September 15, 2008.
10
Credit default swaps (CDS) are a form of insurance against the risk of default. The higher the
perceived risk of default, the higher the rate paid on the CDS.
11
Washington Mutual internal Treasury department presentation: Quarterly Financial Close &
Governance Meeting, 3Q08, September 16, 2008.
12
Goldman Sachs Upgrades Washington Mutual (WM) to Neutral, StreetInsider.com,
September 12, 2008, found at:
http://www.streetinsider.com/Upgrades/Goldman+Sachs+Upgrades+Washington+Mutual
+(WM)+to+Neutral/3984275.html
13
Fox-Pitt Kelton Cochran Caronia Waller, Treasury plan raises attractiveness of potential
sale, Howard Shapiro, September 19, 2008.
14
Market capitalization = share price of $4.25 (close on September 19, 2008) x 1.699 billion
shares. Source: CapitalIQ.
Page 7 of 10
B238
the Date of Receivership.
(i) The OTS found that WMB met the well-capitalized standards through the
receivership date. Consistent with this finding by the U.S. Government, WMIs
contemporaneous internal forecasts anticipated capital levels strongly in excess of all regulatory
well-capitalized minimums even without further capital injections.
15

(ii) In WMIs internal presentations (as of September 2, 2008) and its public
release of 3Q08 earning guidance (on September 11, 2008
16
), the company estimated 3Q08
excess liquidity of $50 billion
17
and an additional cash balance of $12B. Even under its internal
stress case, WMI was forecasting liquidity significantly in excess of its liquidity threshold.
(iii) WMI (on a consolidated basis), reported net GAAP losses for the first and
second quarters of 2008.
18
However, these reported losses were almost entirely due to non-cash
charges to the companys income statement. For both quarters, the company generated positive
operating cash flow totaling over $6.3 billion. In both quarters, cash flow was further augmented
by positive cash flows from investing activities which totaled approximately $4.4 billion through
June 30, 2008. At June 30, 2008, WMI reported $23.7 billion of tangible equity and $26.1
billion of stockholders equity.
19

(iv) At least one Wall Street equity analyst believed that Washington Mutual
had sufficient access to capital. On September 11, 2008 HSBC issued an equity research report
stating that as long as [Washington Mutual] has regulatory support (and we believe WaMu has
regulatory support. . .), it can continue to raise money needed through the deposit market. . .and
FHLB advances.
20

14. The seizure of WMB by the OTS was a one-time event that significantly
transformed the structure of Washington Mutual as an integrated enterprise, and the relationship
between WMI and WMB. As a result WMI, as constituted prior to the date of receivership, was

15
Treasury department presentation entitled, Capital and Liquidity Update, provided to the
Washington Mutual Asset/Liability Management Committee, dated September 2, 2008.
16
Company released guidance after the close of trading on Thursday, September 11, 2008.
17
Of the $50 billion in excess funding capacity, approximately $30 billion was excess borrowing
capacity from the Federal Home Loan Bank system.
18
As of September 25, 2008, Washington Mutual had not filed its form 10Q for the third quarter
of 2008.
19
As reported in Washington Mutuals Form 10Q, for the three-months ending June 30, 2008.
20
HSBC, Washington Mutual: Q3 Guidance Suggests at Least Some Staying Power, by Van
Hesser, 11 September 2008.
Page 8 of 10
B239
very different from WMI, as constituted post-receivership. Because this was a transforming
event that occurred on a single date, it does not provide economic evidence to support a
presumption of insolvency prior to the event, i.e., for all, or part, of the 90-Day Look-Back
period.
15. Given the indicia of solvency prior to the Date of Receivership, it cannot be
presumed that WMI was, in fact, insolvent during the 90-Day Look-Back period. This question
of solvency requires further investigation and analysis.
16. My analysis is ongoing. As a first step in forming a reliable opinion of the
solvency of WMI and WMB, it will be necessary to identify the assets owned by WMI and
WMB as of the petition date and during the 90-Day Look-Back period. I will then need to
identify and analyze the fair saleable value of the assets of both entities on a consolidated and
stand-alone basis. As part of this analysis, it will also be necessary to identify and quantify the
realized and contingent liabilities of both entities, on both a consolidated and stand-alone basis.
The solvency analysis will also require an analysis of both companies actual and forecasted
sources of capital and liquidity. At a minimum, these analyses will need to encompass a range of
dates that are reflective of the transactions identified by both Debtors and JPMC in various
pleadings in this matter. In addition to continuing a review and analysis of the voluminous
documents and information already provided by counsel, I anticipate that additional work steps
may include, but not be limited to:
(a) Review and analysis of certain workpapers prepared by Washington Mutuals
external auditors;
(b) Review and analysis of various intercompany transactions as between multiple
Washington Mutual entities;
(c) Review and analysis of valuation and cashflow models and presentations prepared
by TPG group in connection with the April 2008 transaction;
Page 9 of 10
B240
(d) Review and analysis of certain other third-party bids for the all or some of the
assets of WMI and/or WMB during the relevant time periods;
(e) Review and analysis of information provided to banking regulators;
(f) Rating agency presentations and models, including correspondence between
Washington Mutual and the rating agencies; and
(g) Interviews, including depositions, of key heritage Washington Mutual personnel.
17. I declare under penalty of perjury that the foregoing is true and correct.
Executed in Boston, Massachusetts on July 24, 2009.


_______________________________
Thomas M. Blake


Page 10 of 10
B241
B242
Exhibit A
THOMAS BLAKE
Vice President
INTERNATIONAL
M.BA Accounting,
Rutgers University, School of
Business Administration
BA Economics,
College of the Holy Cross
Post-graduate
studies in business,
American University
Mr. Blake leads the CRA Accounting and Valuation Practice. While at CRA, Tom has testified on
GAAP accounting and valuation matters primarily relating to M&A transactions and troubled
companies. Prior to joining CRA, Mr. Blake was a senior partner at Ernst & Young and managing
partner of E&Y's New England Investigative & Dispute Services practice. At E&Y, he had 32 years
of experience, including serving as audit partner on public and private clients, including American
Express, Shearson Lehman Hutton, Bank of New England, Bankers Trust, PaineWebber, and Ben
& Jerry's Homemade. Mr. Blake is a certified public accountant in Massachusetts and New York.
Mr. Blake has valued over 200 companies, relating to disputed ownership, M&A, solvency and
damages.
He is an accredited senior appraiser in Business Valuation with the American Society of Appraisers.
He has been admitted as an expert and testified in accounting, valuation, and solvency cases in
Federal District, Federal Bankruptcy, numerous state courts, arbitration, and other venues.
Mr. Blake is a certified fraud examiner. He has investigated many business matters and has
significant forensic accounting experience. His investigative and forensic experience often provides
unique inputs for his accounting, reporting, and valuation-related engagements.
EXPERIENCE
Bankruptcy and Solvency
Energy-Performed forensic analysis of a complex energy trading, pipeline, broadband, and
internet company in Chapter 11 with assets in excess of $65 billion. Performed solvency and
valuation analysis of numerous business units, including balance sheet, cash flow and capital
adequacy testing. Valued derivative financial instruments with over $1 trillion of notional value. (In
re: Enron Creditors Recovery Corp. (formerly known as Enron Corp., et aI., Reorganized Debtors,
v. Citicorp Inc., et al.)
B243
THOMAS BLAKE
Page 2
Manufacturing-Dispute concerning solvency and capital adequacy in a leveraged buyout of a
supplier of spandex and latex elastomeric fibers (In re: Dennis J. Buckley v. Goldman, Sachs &
Co., et aL)
Financial Services-Currently performing accounting, valuation and solvency analysis for a major
financial services institution.
Software-Analysis of failure of software and services company, including solvency and fraudulent
conveyances (In re: Divine).
Consumer Products-Solvency and fraudulent conveyances analysis for a sports equipment
manufacturer (RDM Sports Group, Inc., et aL, William G. Hayes, Jr., as Trustee v. Smith Gambrell,
Russell, L.L.P. et aL).
Health Care-Solvency and fraudulent conveyance analysis of hospital in Chapter 11 (In re:
Doctors Hospital of Hyde Park, Inc., LaSalle and ORIX v. Doctors Hospital of Hyde Park, Inc.).
Retail-Determined the value of a fast-food chain's business enterprise and the value of companies
sold in the period preceding bankruptcy for fraudulent conveyance purposes (In re: Murray Burger
King).
Retail-Served as accountant for corporate workout and reorganization of a sportswear company.
Valued the company, prepared offering book, and negotiated sale of company (In re: CB Sports).
Consumer Products-Solvency and zone of insolvency analysis for a holding company with auto
retailing, manufacturing and furniture holdings (In re: John S. Periera, Trace Foam Sub, Inc. v.
Marshall S. Cogan, et aL).
Energy-Analysis of representations and warranties relating to a material adverse change provision
in an acquisition (In re: Coho Energy v. Hicks Muse).
Medical Products-Engaged by a dental products company to assist in a mergers and acquisitions
dispute concerning solvency in a leveraged management buyout (In re: Healthco International, Inc.
v. Hicks Muse, Inc., et aL).
Nursing Homes/Real Estate Development-Business valuation and solvency analysis of an
individual with publicly-held nursing home and real estate development assets (In re: Joseph J.
Luzinski, Chapter 7 Trustee, the Estate of Abraham D. Gosman v. Abraham D. Gosman and Lin
Castre Gosman).
Professional Services-Advisor to the debtor pre and post filing regarding the value of the firm,
partner capital, value of client list and the continuing value of on-going engagements (In re: Gaston
& Snow)
B244
THOMAS BLAKE
Page 3
Transportation-Assisted Trustee in operations of debtor and sale of company. Performed business
valuation and damage calculation related to fraudulent conveyance issues in a railroad bankruptcy
(In re: Delaware & Hudson).
Construction-Analyzed an agreement to dispose of collateral arising from a construction workout in
a liquidation (In re: Frank Briscoe Company, Inc. v. The Travelers Indemnity Company).
Construction-Engaged by a construction company to provide a forensic accounting analysis of
transactions with related parties and piercing of the corporate veil (In re: Stone & Webster).
Construction-M&A dispute involving the sale of a $2.7 billion engineering and construction firm
whose projects include worldwide electric generating plants (fossil, co-generation, and nuclear),
petrochemical facilities, and infrastructure projects, such as dams and bridges (In re: Washington
Group v. Raytheon Company).
Manufacturing-Dispute concerning solvency and capital adequacy in an LBO for a coal-mining
heavy equipment manufacturer including long-term contract accounting and international operations
(In re: Bucyrus-Erie Company and B-E Holdings, Inc.).
Manufacturing-Forensic and insolvency analysis for international constructor of paper and pulp
machinery and mills, including long-term contract accounting (In re: Beloit Creditors Committee v.
PricewaterhouseCoopers LLP).
Investment Company-Analysis of the factors causing the failure of this leveraged hedge fund (In
re: Eagle Cayman).
Securities and Mergers & Acquisitions
Computers and Electronics-Conducted financial analysis of multiple mergers in the high-speed
computer printer industry in an anti-trust matter.
Computers and Electronics-Engaged by a high-technology company to provide expert-Witness
services including mediation testimony in a merger and acquisition dispute as to the accounting for
the carve-out sale of a division.
Computers and Electronics-Engaged by a high-technology company to conduct a forensic
accounting assignment and business valuation including arbitration testimony in a minority
shareholder freeze-out.
Computers and Electronics-Performed a business valuation in a minority shareholder freeze out.
Computers and Electronics-Provided services in a merger dispute concerning the material adverse
change provision in a merger agreement.
Computers and Electronics-Assisted in a dispute concerning valuation of options and minority
shareholder stock in an acquisition.
B245
THOMAS BLAKE
Page 4
Computers and Electronics-Provided services in a merger dispute concerning comfort letters and
a best-efforts clause in a merger agreement.
Computers and Electronics-Cost allocation dispute relating to a merger earn-out provision.
Computers and Electronics-M&A dispute concerning the loss of a major customer immediately
after an acquisition. The company manufactures high-precision metal and plastic parts for
computers and for electronic and aerospace equipment.
Computers and Electronics-Calculation of golden parachute amounts due to corporate executives
in an acquisition.
Computers and Electronics-M&A dispute relating to EBITDA and valuation effect of financial
restatement.
Networking Software-Analyzed software recognition and international software sales practices in a
shareholder class action and SEC investigation.
Networking Software-Determined damages in a shareholder class action alleging false financial
reporting and disclosure.
Networking Software -Valued options for a terminated executive in a dispute arising from an
acquisition.
Networking Software -Valued a minority interest in a marketing and sales subsidiary of a designer,
manufacturer and distributor of network software.
Telecommunications -Defense of criminal action by Securities and Exchange Commission
concerning bill and hold transaction.
Networking and Telecom Software-Calculated damages against an investment bank relating to a
failed private placement.
Software-Assisted in a dispute concerning theft of trade secrets relating to training software.
Software-Calculation of damages in the termination of a joint-venture agreement for development
of maritime computer simulations.
Software-Valued cheap stock in an SEC investigation relating to an IPO for a vision-recognition
software developer.
E-commerce-Analyzed Internet revenue recognition, inventory and related-party transactions and
their effect on M&A pricing.
E-commerce-Analyzed the value of investments by joint-venture partners in an acquisition and the
effect on phantom stock and stock-appreciation rights.
B246
THOMAS BLAKE
Page 5
Professional Sports-Testified as an expert witness for the National Football League ("NFL") on
finance and valuation issues in anti-trust litigation concerning the ability of NFL teams to go public
and the value of an NFL team.
Consumer Products-Analyzed sales practices, revenue recognition and inventory issues in a
shareholder class action for a footwear manufacturer.
Consumer Products-Determined the value of a privately-held specialty cheese company and
calculated damages caused by minority shareholder freeze-out.
Consumer Products-Performed a minority shareholder stock valuation of a processed meat
company in an estate and gift tax matter.
Consumer Products-Engaged by a hygiene products company to perform valuation, litigation and
expert witness services in a dispute arising from the earn-out provisions of a merger agreement.
Consumer Products-M&A dispute concerning valuation of assets and representations and
warranties in computer accessory products company.
Advertising-Determined shareholder class action damages resulting from a financial reporting
fraud in a publicly-held advertising agency.
Advertising/Publishing-Determined the business value of a stock photo agency relating to a theft of
intellectual property.
Retail-Analyzed financial reporting fraud in a food-products company in a shareholder class action
and SEC investigation.
Retail-Provided due diligence and accounting assistance to a supermarket chain related to an
acquisition.
Retail-Performed forensic accounting, business valuation and expert witness testimony for a
supermarket chain in a minority shareholder freeze-out, fraud and corporate opportunity matter.
Retail-Engaged by a supermarket chain to assist in the forensic accounting, valuation and
determination of damages in a corporate takeover attempt.
Retail-Engaged by a drug and camera retailer to provide forensic accounting and business
valuation services in an ownership dispute.
Retail-Analyzed the loss in market value experienced by a supermarket chain due to union
picketing in an M&A dispute.
Retail-Engaged by a grocery wholesaler and retailer concerning overcharges on costs to
franchises.
Retail-Put option and earn-out dispute in international retailer.
B247
THOMAS BLAKE
Page 6
Retail-Calculated the earn-out and the complications arising from subsequent mergers and
synergies on the earn-out provisions in an M&A dispute concerning a retail chain of drug stores.
Retail-Accounting analysis and business valuation relating to a put option of a major shareholder.
Utility-Engaged by a water company to address valuation and purchase price issues related to an
acquisition.
Utility-Engaged by an electric company in a dispute concerning material adverse change in the
$5.7 billion merger of two large regulated and deregulated utilities
Utility-Engaged by an electric company in an M&A dispute pertaining to changes in business
prospects, as well as projections of future revenues, costs, and capital expenditures in a $2.8 billion
merger.
Energy-Analysis of cash flow and business valuation in a call option dispute relating to a privately
held wholesaler and distributor of gasoline and heating oil.
Energy-Analyzed damages relating to a dispute concerning assets held for sale in a hostile merger
of an industrial gas production and distribution company.
Energy-Business valuation for a heating oil and retail gasoline company related to the purchase of
a minority shareholder's interest.
Energy-Solvency and fraudulent conveyance analysis for an LBO.
Environmental-Assisted an environmental testing company in a merger and acquisition dispute
concerning representations, warranties and earn-out provisions.
Environmental-Assisted a waste management company in analyzing the purchase accounting
related to environmental liabilities in a merger transaction.
Aerospace-Assisted an aerospace products company in a merger and acquisition dispute
involving purchase price accounting, goodwill, intercompany debt, and solvency.
Medical Products-Engaged by a magnetic resonance imaging firm to assist in a merger dispute
concerning executive termination benefits and a securities fraud matter involving the company's
revenue recognition practices.
Medical Products-Engaged by a magnetic resonance imaging firm to assist in a mergers and
acquisitions dispute concerning a roll-up of MRI centers and fees paid to investment bankers.
Professional Services Firm-Analysis of and business valuation for partnership interests in a law
firm break-up.
Real Estate-Business valuation related to the sale of a division of a property management
company.
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Real Estate-Provided trial testimony relating to a business valuation of a property management
company in an ownership dispute.
Real Estate-Analysis of a retail mall development relating to a minority shareholder dispute.
Construction -Shareholder class action concerning financial reporting, long-term international
construction contracts.
Chemicals-Determined value of a specialty chemical company and damages resulting from
minority shareholder freeze out.
Entertainment-Provided assistance in the preparation and analysis of projections and performed
valuation work related to acquisitions of television and radio stations.
Entertainment-Provided forensic accounting and financial feasibility services as well as hearing
testimony concerning a racetrack relating to ownership issues.
Entertainment-Provided a videotape distributor with forensic accounting and damages analysis in
a mergers and acquisitions dispute.
Entertainment-Provided forensic accounting and valuation of racetrack for lender liability and
fraudulent conveyances.
Manufacturing-Revenue recognition relating to international sales terms, accounting for long-term
contracts; development of "revenue at risk" model.
Manufacturing-Business valuation and solvency analysis of a management buyout of a farming-
equipment manufacturer.
Manufacturing-Merger and acquisition dispute concerning working capital calculations and
material adverse change provisions in the carve-out sale of a consumer appliance manufacturer.
Manufacturing-Mergers and acquisition dispute concerning representations and warranties relating
to interim financial statements for a manufacturer of aquarium products.
Manufacturing-Mergers analysis relating to international railroad train constructor including long-
term contract accounting.
Financial Services
Investment Advisor-Analysis of services and costs for a mutual fund complex.
Investment Advisor- Analysis of services, costs and fees charged to a mutual fund complex.
Investment Advisor-Testified regarding the value of a minority interest in a closely-held investment
advisory firm.
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Investment Advisor-Forensic accounting for a securities fraud involving a ponzi scheme.
Investment Advisor-Valuation of mutual-fund-complex investment advisor in a minority shareholder
dispute.
Investment Advisor-Forensic accounting on behalf of the Middlesex County District Attorney,
Commonwealth of Massachusetts for a securities fraud involving a ponzi scheme at a registered
investment advisor.
Investment Company-Securities and Exchange Commission-Appointed by the Federal District
Court on behalf of the SEC as Examiner and then Receiver of an investment company. Testified as
to the amount of losses incurred from a ponzi scheme and traced all monies and balances to
customer accounts.
Investment Company-Account reconstruction and forensic accounting relating to escheatment.
Investment Company-Performed due diligence on the acquisition of a mutual fund.
Broker/Dealer-Arbitrator in a merger and acquisition dispute involving earn-out calculations in the
sale of a "wirehouse" brokerage firm between two major financial institutions.
Broker/Dealer-Analysis of customer accounts for alleged improper broker practices. Developed
database to reconstruct and "prove out" all activity and customer balances over a twenty-year
period. Analyzed regulatory compliance, such as suitability and churning. (Numerous
engagements. )
Broker/Dealer-Forensic accounting concerning an internal fraud.
Broker/Dealer-Business valuation of a brokerage company. Developed models to value
independent broker dealers and registered investment advisors.
Broker/Dealer-Forensic analysis of customer accounts, including account reconstruction, suitability
analysis, return calculations, and regulatory compliance.
Broker/Dealer-Determined the value of a broker dealer and corporate records lost in a fire.
Broker/Dealer-Determined the value of a branch office and the economic effect of brokers
recruited by another firm.
Broker/Dealer-In an arbitration, determined value of a branch office and the economic effect
resulting from recruitment of brokers by another firm.
Broker/Dealer-Analyzed lost profits relating to a contract dispute with brokers in an interest rate
swap.
Broker/Dealer-Provided services for an energy derivatives firm in a corporate control dispute.
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Broker/Dealer-Valued a branch of a regional broker/dealer with respect to employees raided by
another firm.
Investment Bank -Testified concerning damages against an investment banking firm relating to a
failed "best efforts" private placement.
Commercial Bank-Analysis of sub-prime loans and COOs, portfolio management of propriety
mutual funds, total return swaps, enterprise cash management, accounting and reporting.
Commercial Bank-Securities and Exchange Commission (SEC)-Expert for the SEC on the
valuation of securities and amount of damages in a commercial bank securities fraud relating to
mutual funds, dormant accounts and escheatment.
Financial Services Institution-Analyzed warehouse loans on securitized credit card accounts.
Financial Services Institutions-Numerous projects involving investigation of loans, collateral
analysis and bankruptcy issues.
Private Equity-Business valuation of the general and limited partnership interests in a large private
equity investment firm. Valuation of privately held portfolio companies.
Venture Capital-Business valuation of general and limited partnership interests in a venture capital
firm.
Insurance-Analysis of merger of US life insurance companies relating to adequacy of underwriting
procedures and resources.
Insurance-Determined business enterprise value of an insurance agency and calculated damages
in a breach of contract by an insurance underwriter.
Insurance/Energy-Calculated damages in a breach of contract matter relating to an insurance
broker for petroleum transportation, distribution, and retailing.
Pension Plan-Account analysis, portfolio reconstruction, and forensic accounting concerning
prohibited real estate transactions.
Transportation-Analysis of acquisition of foreign railroad by a major US railroad.
Intellectual Property
Computers and Electronics-Served as mediator regarding reasonable royalties and other disputes
pertaining to patented technology.
Computers and Electronics-Determined damages caused by patent infringement.